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Analytical Note, December 2015

WTO’s MC10: Agriculture Negotiations – Export Competition

This note provides a brief on Export Competition and the four issues that it covers:

With respect to export subsidies, the EU, the Member with the largest export subsidy entitlements applies zero export subsidies under its Common Agricultural Policy 2014-2020. Commitments to bind export subsidies at zero are therefore a step in the right direction but the extent of its value is limited. The Green Box remains undisciplined – this is a major loophole not just in the pillar of ‘domestic supports’ but also in the export competition pillar as EU’s domestic supports do subsidise exports.

The proposed disciplines on export credits focus on two elements in export financing support – maximum repayment period and the self-financing requirement. In both cases, the US does not want
to be bound by what is contained in the Rev.4 text (the December 2008 draft agriculture modalities). In the area of agricultural exporting State Trading Enterprises (STEs), the US proposes to expand the
scope and strengthen the prohibition on STEs with export monopoly powers. At the same time, US proposes to reduce considerably the S&D provisions in Rev.4 in that area. Such language is likely to impact on developing countries’ agricultural STEs.

On food aid, the EU, Brazil and others aim to harvest in Nairobi a text along the lines of Rev.4 but with weaker disciplines on monetisation. The rules are already quite flexible in Rev.4 as monetisation is allowed in various circumstances. In response, the US has put forward a proposal allowing for greater flexibility. Displacement of local and regional production has been a problem caused by food aid that has not been well targeted. This problem is not likely to be resolved with the watered down proposals.